Katie Holmes has sued American Media Inc., owner of the Star tabloid, for libel, and is seeking damages of $50 million.

The lawsuit, over a cover suggesting that the actress used drugs, was filed in federal court in Los Angeles. (Read the full lawsuit here.)

Star's "vicious lies about plaintiff, designed to hype the sale of its sleazy tabloid magazine, were calculated to cause severe harm," reads the lawsuit, obtained by TheWrap. "The average reader (would) understand that plaintiff has become shockingly addicted to drugs… There is no other way to understand them. The cover even created the false impression that, but for plaintiff's nightmare drug addiction, she would 'leave' her husband."

In a statement, AMI said it stood behind the story.

The cover featured a photo (left) of Holmes looking worn and sad, with the cover line: “ADDICTION NIGHTMARE – Katie DRUG SHOCKER! The real reason she can’t leave Tom.”

Inside, the magazine backs off the claim of addiction, citing incidents in which Holmes joins Scientology sessions where an "e-meter" is used. An electrical measuring instrument used in the controversial group’s auditing sessions, the e-meter allegedly measures electrical resistance and allegedly reflects past emotional experiences.

The article states that the e-meter might release endorphins, "hormones that cause a pain-killing, mood-elevating effect."

A Scientology member is quoted as saying about using the e-meter, "Like a heroin addict, you want another dose."

An attorney for Holmes told TheWrap that while tabloid slurs are common, this one crossed the line. "We see these tabloids every week," said attorney Aaron Moss of Greenberg Glusker Fields Claman and Machtinger. "They’ve been attacking her and her husband for years now, and she finally said, 'Enough is enough'. She wants to stand up for her legal rights. This is such an outrageous statement, this idea that this loving mother is on drugs, or suffering an addiction nightmare – there’s not a shred of truth to it."

TheWrap first reported the news of the impending lawsuit on Tuesday morning.

Proving libel is difficult in U.S. courts. The plaintiff must prove defamation occurred, and that injury to their reputation happened as a result. In the case of celebrities, it's even harder; Holmes must prove that the magazine acted with malice, and knew that it was publishing false information.

"Here it's beyond doubt that they knew it was false," said Moss. "There's no support inside the article to substantiate the attention-grabbing headline."

The lawsuit was preceded by a demand for a retraction from Moss, citing many of the same offenses as are in the lawsuit.

In response, counsel for AMI wrote "with all due respect, Star declines your demand… It is not defamatory to state that a person is addicted to the 'feeling of a natural high,'" he wrote. "Indeed, as you acknowledge, some people are 'addicted' to the pleasure they receive from exercising. Surely you would not claim such a statement was defamatory."

AMI issued the following statement: "Star fully stands behind the editorial integrity of what we have published concerning Ms Holmes’ controversial use of the Scientology “e-meter”. The physical effect of the e-meter on its users is a matter of significant public concern and we plan to vigorously defend the suit filed by Ms. Holmes.

"Many ex scientologists have testified that the e meter sessions have mood elevating effects. The cover and the inside article discuss these effects. Our attorneys look forward to deposing Ms. Holmes about her experiences with Scientology and the e-meter, and expect that the case will be promptly dismissed by the court."

Previously:

Katie Holmes is expected to file a libel lawsuit in federal court on Tuesday seeking $50 million in damages from American Media Inc., owner of Star magazine, TheWrap has learned.

The actress and wife of Tom Cruise is furious that the tabloid ran a cover suggesting that she used drugs, which she considers deliberately defamatory, according to her representative who spoke to TheWrap.

The article does not allege that Holmes uses drugs. But Holmes’ representative said that the cover clearly suggests that she does.

“The cover is libelous no matter what they say inside the magazine,” said the representative.

The tabloid frequently targets Holmes and Cruise, most often suggesting that their marriage is in trouble, they’re about to separate and Holmes is miserable.

In the past, the Star has lamented Holmes’ “tortured life.” In October, it said the couple’s “marriage contract collapses.”

American Media also publishes the National Enquirer, RadarOnline and several other lifestyle publications, including Men’s Fitness and Shape.